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Investing.com - RBC Capital has reduced its price target on Adobe (NASDAQ:ADBE) to $430.00 from $480.00 while maintaining an Outperform rating on the stock. According to InvestingPro data, Adobe currently trades at $345.81, near its 52-week low, with a P/E ratio of 22.24 and impressive gross profit margins of 89.25%.
The firm expects Adobe to report solid third-quarter results when the company announces earnings after market close on September 11.
RBC Capital notes that investor sentiment around Adobe remains focused on competition and generative AI monetization concerns despite the company’s anticipated performance.
The firm indicates that Adobe’s management has shown an improved understanding of current market sentiment, and expects the company’s narrative to continue evolving around generative AI monetization strategies.
RBC Capital points out that Adobe stock is currently trading at a discount compared to its large-cap peers, which presents an opportunity despite the reduced price target.
In other recent news, Adobe is preparing to release its fiscal third-quarter earnings, with several analysts adjusting their outlooks ahead of the announcement. Mizuho has lowered its price target for Adobe to $460 from $530, citing mixed signals, including strong enterprise activity but struggling web traffic growth. UBS also reduced its price target to $400 from $430 due to concerns about AI risks, maintaining a Neutral rating. Meanwhile, RBC Capital reiterated its Outperform rating and set a price target of $480, despite acknowledging increasing competition in the creative tools market. In contrast, Melius Research downgraded Adobe to Sell, with a price target of $310, highlighting concerns over AI’s impact on the software-as-a-service model. Rothschild Redburn maintained its Sell rating and a $280 price target, expressing concerns that Google’s new AI tool could disrupt Adobe’s Photoshop. These developments reflect the varied perspectives on Adobe’s future amid technological shifts and competitive pressures.
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